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newbrat2
Apr 24, 2009, 12:07 PM
A new computer system allows your firm to more accurately monitor inventory and anticipate future inventory shortfalls. As a result, the firm feels more able to pare down its inventory levels. What effect will the new system have on working capital and on the cash conversion cycle?
ROLCAM
Apr 24, 2009, 10:37 PM
Freeing CASH from holding excess Inventory
has a beneficial effect on Working Capital.
Mathematically the cash conversion cycle
should be reduced due to the new volume
of Inventory held.